“About 90 per cent of the real estate stock in the country has already seen a correction of about 20-30 per cent. There is no scope for further rate cut. Any further cut will lead to NPAs and non-delivery of projects,” CREDAI (National) President Getamber Anand told PTI.

“His (RBI Governor) statement should not be taken out of context as he has recommended an adjustment and not necessarily a price cut. The adjustment could be through other ways like easy payment scheme to attract home buyers,” he said.

The real estate sector is facing slowdown in demand leading to mounting unsold stocks and huge delays in project completions.

“I am hopeful that as interest rates come down, there will be more credit and buying. And I am also hopeful that prices adjust in a way that encourage people to buy,” Dr Rajan had said while delivering the Y B Chavan Memorial Lecture here.

The Reserve Bank of India (RBI) has lowered rates by 1.5 per cent cumulatively since January last year and earlier this month the policy rate was cut by 0.25 per cent to 6.5 per cent — its lowest level in more than five years.

More than half of the rate cuts have been passed on by the banks to consumers. “My sense is that there is a little bit of everything that needs to happen” for the revival in the real estate sector, Dr Rajan said.

“There is an issue of certainly how they see the housing market and how they see prices. There has to be an adjustment so that more people want to go and buy,” he had said.